Scott Bessent, billionaire investor and founder of Key Square Capital Management Fund, joined Wednesday’s edition of The Tennessee Star Report with Michael Patrick Leahy to discuss how the stock market’s rally coincides with former President Donald Trump being ahead in the 2024 presidential election polls.
In a letter to investors, which was recently leaked to Bloomberg, Bessent’s Key Square Capital Management Fund said it believes that equity markets are “in the midst of a ‘Trump Rally’ that will last as long as he remains ahead of Biden in the polls.”
“It is likely that [Trump] would seek rejuvenation/redemption rather than revenge if elected this November. A second term would be expected to embrace Calvin Coolidge-style Roaring Twenties policies over a Herbert Hoover outcome,” the letter added.
During Wednesday’s interview with Leahy, Bessent elaborated on his hedge fund’s letter describing the “Trump Rally,” saying, “What we are saying is that the stock market is rallying because Donald Trump is ahead in the polls.”
“We went back and looked, and so since 1952, whenever there’s an incumbent running, the market does tend to go up but I think with Trump, it’s a little different,” Bessent explained.
“I think two factors with the market going up with a potential Trump victory – one is the market is looking toward November 5th and the promise of Trump tax cuts being renewed in 2025, light touch regulation, more drilling, greater energy independence and all the overseas skirmishes coming to an end. On the other side, Janet Yellen and to some extent the Fed are also looking at the polls that Donald Trump’s ahead and like every incumbent administration, they’re trying to keep their guy in 1600 Pennsylvania,” Bessent said.
“So they are providing a lot of ample liquidity, bank reserves are going up, they’re spending money, talking about cutting interest rates. So, you know, our point, and looking at this is we’re really in the Nirvana scenario right now, is Trump’s ahead in the polls and the market likes his policies and the White House economic apparatus is panicked and they are pumping to try to keep Trump out,” he added.
Bessent explained how the market for the past 14 months has averaged based on whether Trump or Biden was ahead in the polls.
“The market for the past 14 months, whenever Donald Trump is, if we take, every trading day for the past 14 months where Donald Trump has been ahead, cumulatively, the market is up 35 percent. We take every trading day from when Joe Biden’s been ahead, the market is up 3 percent. So right now the market seems to believe that President Trump could be returned to the Oval Office,” Bessent said.
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Kaitlin Housler is a reporter at The Tennessee Star and The Star News Network. Follow Kaitlin on X / Twitter.
